Rates law far from perfect

BRIGHTON Council says the State Government-proposed local government legislation, promised to clear up any questions surrounding Brighton’s fair rating system is workable but far from perfect.

The proposed legislation lacks flexibility. It would only allow councils to set one minimum rate and restrict this to only 35 percent of total properties in a municipality. As well the legislation clearly states that rates are a form of taxation and the value of a ratepayer’s land is the key indicator of capacity to pay, so relying on the outdated Assessed Annual Value (AAV) system. The Government’s legislation is based on the questionable Access Economics findings.However, under the legislation, to be enacted prior to Christmas, Brighton will be able to continue its fair rating system that has provided the municipality with the lowest rate rises in the State. But it will impose significant constraints on Brighton that will not apply to other councils.

Mayor Tony Foster said the legislation would mean that council’s using rating systems like Brighton’s would have to have a clear rating policy and engage in exhaustive information provision and consultation, as well as seek the approval of the Director of Local Government.

“We have absolutely no problem with having a clear policy and ratepayer consultation, but such transparency should apply to all councils and not just to Brighton,” Cr Foster said.

“We already have a clear ratings policy based on keeping rate rises at or below the increase in inflation, a differential recognising capacity to pay and charging fixed fees for common services.

“Unfortunately, the Government seems intent on bringing in legislation based on the flawed Access Economics report that did not even consider Brighton’s fair rating system.”

Mayor Foster said under Brighton’s fair rating system, a user-pays principle applied wherever possible, with the general rate kept to a minimum

“A service rate applies to all services that can be removed from the general rate and this reflects the full cost of providing the particular service,” Cr Foster said.

“Brighton recognises the capacity to pay principle by varying the flat rate by suburb with differential rates applying and variations by land use and location.

“A flat rate applies to all residential properties varied by suburb. For example, Pontville ratepayers pay $780 per house and Bridgewater ratepayers pay $665 per house. All undeveloped residential land blocks are charged an annual rate of $206.

“Each land use sector – residential, commercial or primary production is rated separately.”

Mayor Foster said an AAV-based rate applied to non-residential properties but these were varied by land use according to Section 107 of the Local Government Act, with annual increases also maintained at or below CPI.

He said under Brighton’s fair rating system, rate movements as a result of revaluations of individual residential properties had been eliminated and movements in non-residential properties were contained to those sectors.

“We have eliminated rate shocks and all both residents and businesses have certainty that there will not be facing massive or unreasonable increases.

“By employing these principles and with efficient Council management, we have been able to contain annual rate rises to at or below the increase in the Consumer Price Index for the past 15 years.

“We are determined to maintain this position and will continue to lobby the Parliament to ensure that Brighton’s fair rating system, which is overwhelmingly supported by our community, can be maintained.

“I will also be making representations to the Parliament to improve rates’ transparency on the part of all councils and to provide more flexibility in the legislation,” Cr Foster said.